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Equality Required in Each Pay Type, Not Just Total: 4th Circuit

Dec. 3, 2021, 5:52 PM

A medical devices company must face a female former regional sales manager’s claim under the Equal Pay Act because a lower court mistakenly rejected it on the ground that she made more overall than her male comparator, the Fourth Circuit ruled Friday.

The plain text of the 1963 law forbids employers to pay a woman doing equal work as a man at a lower rate, the court said. That means Tracy Sempowich has a viable claim based on the lower salary she was paid in some years by Tactile Systems Technology Inc. than fellow regional sales manager Greg Seeling, even though the higher commissions she earned resulted in higher total compensation, the court said.

The “critical portion” of the Equal Pay Act’s language “says nothing about total wages; it places all the emphasis on wage rates,” the U.S. Court of Appeals for the Fourth Circuit said. That makes wage rate “the proper metric,” it said.

The ruling could provide a big boost to the U.S. women’s soccer team, which is making a similar argument to the Ninth Circuit in its landmark Equal Pay Act suit.

The district judge’s mistake was likely the result of misreading the definition of “wages” in the Equal Employment Opportunity Commission’s Equal Pay Act regulations, Judge Diana Gribbon Motz said.

The regulations define wages as including all forms of pay, whether described as salary, wages, profit sharing, or by some other designation. “But this definition is beside the point,” Motz said.

Just because wages can include commissions and salary doesn’t “mean that all types of remuneration should be combined into one lump sum when comparing the earnings of a male and female employee,” she said.

If it did, an employer could pay a woman half as much as a man and require her to work twice as long to make the same amount, the court said.

And the EEOC, which backed Sempowich as an amicus curiae, says elsewhere in its regulations that an employer can’t pay a woman a lower hourly rate and try to equalize the differential by occasionally paying her a bonus, Motz said.

The court also revived Sempowich’s Title VII of the 1964 Civil Rights Act sex discrimination and retaliation claims based on her reassignment to a position without direct reports.

Judges J. Harvie Wilkinson III and Paul V. Niemeyer joined the opinion.

Noble Law Firm PLLC represented Sempowich. Stinson LLP and Womble Bond Dickinson LLP represented Tactile. EEOC attorneys in Washington represented the commission.

The case is Sempowich v. Tactile Sys. Tech., Inc., 4th Cir., No. 20-2245, 12/3/21.

To contact the reporter on this story: Patrick Dorrian in Washington at pdorrian@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Patrick L. Gregory at pgregory@bloomberglaw.com

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